For a time, Baitullah Mehsud appeared to have cloaked himself in the historical garb of the Faqir of Ipi, a militant cleric whom British colonial troops spent much of the 1930s and 40s chasing through the mountain passes of Waziristan.

"They sought him here, they sought him there, those columns sought him everywhere," went an old British couplet that equally applied to Mehsud as he shrugged off efforts by Pakistani and, more recently, US forces to kill him.

In June a CIA-operated drone fired a barrage of missiles at a funeral for militants killed in an attack that day. Mehsud had slipped away hours earlier. Now, though, the odds seem to have fatally narrowed.

If the blizzard of reports out of Washington, Islamabad and the tribal areas are confirmed, the US has decapitated Pakistan's most notorious Taliban outfit. Over the two years since he founded the Tehrik-i-Taliban Pakistan (TTP), Mehsud rose from a little-known border warrior to public enemy number one, notorious for mastering the dark art of suicide bombing.

Coming on the heels of the army's success in the Swat valley this summer, his apparent death could signal that Pakistan is finally turning the tide in its struggle against Islamist militancy. But the war is by no means won.

Over the past two years the TTP has grown into a powerful confederation of militant groups across the federally administered tribal areas whose leaders swear fealty to Mehsud. The man tipped to replace him, Hakeemullah Mehsud, currently commands operations in the Orakzai tribal agency, south-west of Peshawar. This year he claimed responsibility for an assault on a police training centre in Lahore and a military checkpost in Islamabad.

But the death of Mehsud will test the TTP's unity and its ability to inflict suicide attacks beyond its tribal stronghold. Reports of fresh fighting this morning between pro- and anti-Baitullah factions of the Mehsud tribe in Tank, on the edge of South Waziristan, indicate that the Pakistani military intends to press its advantage and splinter the organisation.

Earlier attempts to do so failed. In June one such military proxy, Zainuddin Mehsud, was shot dead by one of his own bodyguards, probably at the behest of Baitullah.

The fact that it took a US missile to kill Mehsud is a mark of the inability of Pakistan's armed forces to touch him, but also of recently improved co-operation between Pakistani and American intelligence, a relationship long characterised by mutual distrust.

While American spies have been allowed to co-ordinate strikes in the tribal belt for at least five years – the first strike, against commander Nek Muhammad, occurred in 2004 – Pakistan privately complained that the US focused its firepower on Taliban commanders attacking Afghanistan but refused to strike Mehsud, whose campaign of chaos was dangerously destabilising Pakistan.

The relationship started to visibly change last spring when Predator and Reaper drones started to target Mehsud's mountain stronghold in South Waziristan. In a recent briefing to the Guardian, officials within Pakistan's Inter-Services Intelligence (ISI) agency expressed satisfaction that the Obama administration was acting on their concerns.

Yet tensions remain. Even if the TTP were to crumble, a significant Taliban threat would remain to provide support to hundreds of al-Qaida militants, including Osama bin Laden, in the tribal belt. Militant commanders Maulvi Nazir, in South Waziristan, and Qari Gul Bahadur, in North Waziristan, control substantial militant networks that dispatch thousands of fighters across the porous border into Afghanistan to do battle with western soldiers.

Bahadur, in particular, is thought to be sheltering many of the Arab fighters – possibly including Bin Laden – who are most keenly sought by western countries. He is also closely linked to Sirajuddin Haqqani, a powerful Afghan commander blamed by the US for hundreds of attacks in Afghanistan.

But the Pakistani army has been reluctant to tackle either Nazir or Bahadur. This is partly due to the difficulty of taking on their highly motivated, battle-hardened warriors in such difficult terrain. Many western analysts also believe that Pakistan's security establishment sees the two men as "good Taliban" – proxies who play a part in Pakistan's broader regional strategy of parrying Indian influence in Afghanistan.

And so, while the latest incarnation of the elusive Faqir of Ipi may be dead, another may yet emerge.